June 2016 Newsletter

Dream of the day when we can put our out-of-office notification on forever and settle down in the sort of place previously reserved for vacations. But where to go?Summer is here and many potential retirees are in full swing to travel and find that special place to call home! Have you done your homework? Well the AARC has done that for you! Please take a look at our Seal of Approval cities and communities.

We are looking forward to our Annual Conference in Asheville Nov. 10-12, 2016. Titled Retiree Attraction – Position Your Community for Success, this year’s conference will focus on timely strategies and research to help you maximize your return on relocating retirees. Registration is now open and it’s a wonderful opportunity to explore the nuts and bolts of our industry! Visit our Conference Page to learn more – AARC Annual Conference. Whether you’re a private developer, a chamber or tourism professional, or a government official, AARC is your information source!

Sincerely,

Andre’ Nabors Chair, The AARC

“Retiree Attraction – Position Your Community for Success”

November 9 – 11, 2016 Conference – Asheville, North Carolina.

With a town slogan of “retire like a Vanderbilt”, AARC names Asheville, North Carolina as host of the 2016 Annual Conference. The epitome of Asheville is what the AARC is all about – it’s a city of inspiration, rejuvenation and self-expression. The combination of these three characteristics makes Asheville truly special and a city in which developers and municipalities inspire to be. Daily, Asheville receives on average 27,000 visitors and is home to one of the largest private residences in the country! Recent accolades include: US News and World Reports “10 Best Places to Retire”, TRAVEL + LEISURE #10 on its’ “World’s Best Cities” list and Frommer’s “One of the must see destinations in the World.”

Don’t miss your opportunity to see what this town has to offer while learning what you can do for yours.

Americans Are Feeling Wealthier, More Upbeat

Daily Real Estate News, REALTOR.com / June 8, 2016

Fannie Mae’s Home Purchase Sentiment Index zoomed to an all-time high in May as consumers get more upbeat about their paychecks and home selling. In May, the index reached a reading of 85.3, which follows an 18-month low reached in March.

Three of six components the index measures registered increases last month, led by a 7 percentage point increase in the number of consumers reporting significantly higher income than a year ago. Also, the number of consumers who expect home prices to increase over the next 12 months rose 5 percentage points. Consumers were also upbeat that mortgage rates would decrease over the next year as well.

That said, the index indicator on whether it’s a “good time to buy” dropped 1 percentage point to an all-time survey low in May.

“Continued home price appreciation has been squeezing housing affordability, driving a two-year downward trend in the share of consumers who think it’s a good time to buy a home,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The current low mortgage rate environment has helped ease this pressure, and fewer than half of consumers expect rates to go up in the next year. While the May increase in income growth perceptions could provide further support to prospective home buyers as the spring/summer homebuying season gains momentum, the effect may be muted by May’s discouraging jobs report.”

29 percent of Americans say now is a good time to buy a home, a drop of 1 percentage point from March and an all-time survey low for the second consecutive month.

52 percent of consumers believe now is a good time to sell a home – an all-time survey high.

42 percent of Americans believe that home prices will go up.

72 percent of Americans say they are not concerned with losing their job, a drop of 2 percentage points from March.

18 percent of Americans say their household income is significantly higher than it was a year ago, up 7 percentage points from March and at an all-time survey high.

Home Sales Are at a 9-Year High

Lucia Mutikani, Money.com/REUTERS / June 22, 2016

Existing home sales rose nearly 2% in May.

U.S. home resales rose in May to a more than nine-year high as improving supply increased choice for buyers, suggesting the economy remains on solid footing despite a sharp slowdown in job growth last month.

The National Association of Realtors said on Wednesday existing home sales increased 1.8% to an annual rate of 5.53 million units last month, the highest level since February 2007.

April’s sales pace was revised down to 5.43 million units from the previously reported 5.45 million units. Economists polled by Reuters had forecast sales rising 1.1% to a 5.54 million-unit pace in May.

Sales were up 4.5% from a year ago.

The strong home resales added to retail sales data in painting an upbeat picture of the economy. That should help allay fears about the economic outlook which were stoked by last month’s paltry job gains.Existing home sales surged 4.1% in the Northeast and climbed 4.6% in the South. Sales in the West, which has seen a strong increase in house prices amid tight inventories, jumped 5.4%.

In the Midwest, sales tumbled 6.5% last month. The decline, however, followed recent hefty gains.

The number of unsold homes on the market in May rose 1.4% from April to 2.15 million units. Supply was, however, down 5.7% from a year ago.

At May’s sales pace, it would take 4.7 months to clear the stock of houses on the market, unchanged from April. A six-month supply is viewed as a healthy balance between supply and demand.

With inventory still tight, the median house price soared 4.7% from a year ago to a record $239,700 last month.

What Building 1,000 Homes Means to the U.S. Economy

Paul Emrath, NAHB.com / June 21, 2016

According to NAHB’s National Impact of Home Building model, building 1,000 average single-family homes generates 2,975 jobs and $111.0 million in taxes and fees for all levels of government. Similarly, building 1,000 average rental apartments generates 1,133 jobs and $42.4 million in taxes.

The jobs are measured in full-time equivalents (enough work to keep one worker employed full-time for a year), and are broad-based. Although a substantial share of the employment is generated in the construction industry, other jobs are created for employees in firms that manufacture building products, transport and sell those products, and provide professional services to home builders and buyers (e.g., architects and real estate agents). A breakdown by industry is shown below, along with the wages and business profits generated.

In the construction industry, the profit generated for proprietors (individuals who own their own businesses) tends to be quite substantial relative to wages and salaries. This is largely due to the profit generated for owners of the subcontracting businesses that usually handle a large share of the construction work. In some cases, the owners of these businesses perform construction work themselves. In fact, this is essentially true by definition for the many one-person subcontracting firms that populate the industry.

Wages, profits and the construction activity itself are subject to a variety of taxes and fees that generate revenue for the approximately 90,000 different governments in the U.S. The $111.0 million in taxes and fees generated by 1,000 single-family home includes $74.4 million in federal taxes (mostly income taxes and Social Security), $10.3 million in state and local income taxes, $6.9 million in state and local sales taxes, and $13.7 million in impact, permit and other fees local governments impose on new construction.

Similarly, the $42.4 million in taxes and fees generated by 1,000 rental apartments includes $28.4 million in federal taxes, $3.9 million in state and local income taxes, $2.6 million in state and local sales taxes, and $5.4 million in permit and other construction-related fees collected by local governments. These fees are part of the government regulation that in total accounts for 24.3 percent of the price of a new home.

See NAHB’s National Impact web page for more detail and information on how the numbers are estimated. Keep in mind that all the numbers in this post are national in nature, with an emphasis on the suppliers of all the products and services that go into a new housing unit, no matter where in the country the suppliers are located. Do not try to use these national numbers to say something about economic impacts in the state or local area where the home is built. NAHB has a distinct set of Local Economic Impact estimates for that.